Enticed by vague promises of summer work, a number Santa Barbara students each year become Vector Marketing sales representatives. Some find the experience lucrative and rewarding. Others say the company is "sketchy."

Tuesday, August 2, 2011

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On a late afternoon in June, seven dressed up 18- and 19-year-olds sat nervously in an unadorned waiting room on upper State Street. A few of them filled out paperwork, but most were glued to their cell phones. No one spoke.

The students — many of whom had graduated from high school just weeks before — were waiting to be interviewed by Vector Marketing, a company that had enticed them with flyers advertising some undefined “Work for Students.”

In the interview, the students would learn that Vector Marketing contracts independent sales representatives — typically recent high school graduates like themselves — to work part-time over the summer selling upscale knives and kitchen accessories. Sales representatives are hired throughout the year, but summer is Vector’s crunch time to recruit new reps.

While some of the students — suspicious of a scam — will leave the interview and continue their summer job search in more traditional venues, several of them will take the position. But only some of these representatives will stay with the company long enough to build up a profitable client base.

As Vector Marketing braces for a pending $13 million California class action settlement that will be finalized in the next few weeks, the company is making a national push to shed its negative image. Meanwhile, the Santa Barbara community remains divided on the company. While some workers and customers praise Vector for offering valuable work experience to students right out of high school, others accuse the company of using overly aggressive recruiting tactics and preying on desperate, naive students.

Paul Wellman

As part of their demos, sale representatives cut a number of objects with the knives to display their durability and sharpness.

The Sales Business

Founded in 1981, Vector Marketing is the sales arm of New York-based Cutco Cutlery, which manufactures knives and kitchen products for Vector representatives to distribute. Nationwide, Vector has over 200 offices and contracts 60,000 student workers annually, the majority of whom are recruited for entry level sales representative positions over the summer.

Vector reps — who are technically independent contractors, not employees — first undergo a three-day unpaid training process in which they learn and practice demonstrations with the knives they will be selling. After completing training, sales representatives are instructed to call friends and family — who must be over 25 and working full time — to set an hour-long appointment to come to their homes and demonstrate Cutco products. From this initial appointment, the company hopes that sales representatives can build a client base from a network of referrals.

Armed with rope, pennies, and leather, the sales representatives demonstrate their knives on these and any other available fruits or vegetables as they try to make a sale. Sales representatives earn a commission of between 10 and 30 percent for every successful sale and $16 for every unsuccessful appointment. According to the company, new sales representatives make a sale in approximately 60 percent of appointments, while more experienced workers can make a sale up to 70 percent of the time. Sales representatives set their own appointments, and can work as frequently or infrequently as they wish.

But up until February of this year, there was a catch. New sales representatives were required to make a $135 safety deposit before they were given a demonstration kit to use during appointments. For newly hired students — many of whom had never held a real job before — the deposit marked a significant financial burden. Although Vector guarantees a refund of the safety deposit for sales representatives who leave the company, the required upfront payment has contributed to its dubious reputation.

A Troubled History

Over the years, multiple ex-sales representatives have sued Vector — a Better Business Bureau-accredited corporation — for alleged violations of state and federal labor laws. In 1990, the Arizona Attorney General sued Vector for alleged deceptive recruiting techniques. After seven years of legal proceedings, the case was resolved in a settlement, which required Vector to reform its advertising of its compensation system in Arizona. In 1994, the state of Wisconsin ordered Vector to refrain from deceptive recruiting practices, leading the company to temporarily stop recruiting in the state.

Another ex-sales representative who appealed to the New York Department of Labor to win compensation for unpaid training cofounded an online group called SAVE (Students Against Vector Exploitation). Their Yahoo group — which has over 1,100 members — holds monthly chat room meetings “to expose the unethical and scandalous nature of this company,” according to the group’s Web site.

By Paul Wellman

Cutco Knives brochure

In 2008, Vector was confronted with its most serious legal challenge yet when Alicia Harris — a former sales representative at Vector’s Pasadena office — sued Vector in a class action lawsuit for allegedly violating California labor laws. Harris’s lawyer Stanley Saltzman argued that the company’s three-day unpaid training period violated California minimum wage law and that Vector required sales representatives to “purchase” their demonstration kits.

“The term [‘security deposit’] was just a disguise,” said Saltzman. “Sales reps shouldn’t have had to pay for [the demonstration kit] upfront.”

While Vector argued that the $135 demonstration kit fee was a returnable security deposit, Saltzman cited data that suggested that over 90 percent of Vector sales representatives in California do not pursue or otherwise receive a refund from the company upon leaving the company. To avoid further litigation, Vector agreed to a settlement earlier this year, which would require them to pay a total of $13 million to be distributed among California sales representatives who worked for the company between October 15, 2004, and April 6, 2011. The settlement is still pending final approval in court on August 10.

For its part, Vector is “looking at how we might address the concerns this case raised,” according to Sarah Baker Andrus, who is Vector’s director of External Relations and Academic Programs.

One of these concerns may have already been addressed. In the midst of litigation over the $13 million settlement, Vector made a corporation-wide decision to remove the controversial security deposit fee for a new demonstration kit. Their workers may now borrow a demonstration kit from the company at no charge.

Despite coming in concert with the costly lawsuit, the decision was made to expand opportunity for potential sales representatives, said Andrus. “By saying we no longer collected that deposit, somebody who perhaps was on the fence about the opportunity or didn’t understand or might have been uncomfortable now has a much easier decision,” she said.

Now in its first summer after revoking the controversial fee, Vector Marketing stands poised to redefine its role in the Santa Barbara community.

A Campus Presence

Vector Marketing established its Santa Barbara office at 3887 State Street #208 in May 2006. The Santa Barbara branch has steadily grown in its five years of existence.

By June 20 of this year, Vector had already interviewed 160 applicants for its sales representative positions in Santa Barbara. Only 18 of these applicants joined the company.

To recruit its large applicant pool, Vector maintains a visible presence on college campuses in Santa Barbara. Advertising “work for students,” recruiters use tabling, job fairs, flyers, posters, and chalkboard postings to spread the word at UCSB and SBCC. They also use a direct mailing company to send a recruiting letter to every recent public high school graduate in Santa Barbara at the beginning of the summer.

Although Monica Israel — Vector’s Santa Barbara branch manager — said that all Vector recruiting tactics are in compliance with campus career centers, an SBCC employee said this is not the case.

The employee — who requested anonymity to limit her involvement with Vector — said that Vector recruiters come into SBCC classrooms without permission to post chalkboard advertisements. When confronted by lecturers, the recruiters say untruthfully that they are affiliated with the SBCC Career Center, according to the employee.

“I’ve had a lot of frustration with them,” she said. “The reps are just pushy and willing to lie about anything to recruit our students.”

She added that during her 10 years at SBCC, Vector recruiters are “the number one most-complained-about troublemakers.”

Israel denied the allegations against her recruiters, emphasizing that the alleged deceitful practice is against company policy.

Paul Wellman

Cutco Knives

A Disappointing Experience

At the beginning of last summer, Lauren Jackson — who was 18 at the time — stumbled across an advertisement for “Work for Students” while on her Facebook account. She had just graduated from Santa Barbara High School days before, and was looking for summer work before beginning her college career at SBCC in the fall.

Although she was uncertain as to what kind of work she was applying for, Jackson called the number listed in the advertisement to schedule an interview.

Jackson was quickly hired and began her training, where she said she learned valuable skills about salesmanship. But when she was instructed to put down a $135 security deposit for a demonstration kit, she began to question Vector’s legitimacy.

“It’s just not fair,” she said. “You’re trying to get a job to make money and they’re asking you to spend probably more than what you have at the time.”

Jackson’s doubts intensified further when she was instructed to call family and friends to set up her first client appointment.

“I thought it was a rip-off,” she said. “You’re basically trying to sell something to your family.”

Jackson set up an appointment with a family friend and made her first sale, earning about $16 in commission. But after researching lawsuits filed against Vector with her father, Jackson decided to quit the company.

Although she was given instructions about how to return her demonstration kit for a refund of the security deposit, she decided to keep the demonstration products, which were “actually pretty good knives.”

Though she had the option to break even, Jackson left the company about $120 poorer than she had been upon joining.

A Rewarding College Job

But not all Santa Barbara students have lost money while working for Vector. Eighteen-year-old Michelle Dang is a Vector success story, earning about $500 a month since joining the company this past April.

But Dang — who uses her Vector earnings to help fund her education at SBCC and UCSB — said she understands why Vector has a bad reputation.

“The way they do things is kind of sketchy,” she admitted. “It may seem like a scam, but it’s actually really legit.”

Dang — who spent much of the past school year searching for a part-time job — had eliminated Vector Marketing as a potential employer after hearing rumors from friends that the company was a scam.

But when she was given a flyer on campus advertising “work for students” (and omitting the company name), she decided to pursue the position.

“I had no idea what it was until I walked into the office for my interview,” she said, recalling her surprise when she realized she had walked into the Vector office.

Although she thought that Vector was “weird” after learning about the company’s door-to-door sales techniques in her interview, she decided to give the job a try.

She said she became a convert after earning $63 in commission in a sale during her first appointment with her friend’s mother. “At that point I was pretty impressed,” she said. “Once they started direct depositing, I knew it was real.”

And since making her first sale, Dang said she has been completely satisfied with her job at Vector. “It’s good money and it teaches you a lot about the business world,” she gushed. “I’m so glad it didn’t turn out to be a scam.”

But Dang admitted that had the $135 security deposit still been in place when she had started at the company, she would not have taken the job. She said that while demonstration kits are still available for purchase for sales representatives who do not want to have to check the loaner kit in and out of the office, she has never felt any pressure from the company to buy one.

As Vector moves forward from its scandal-ridden past, it is relying on poster children like Dang to prove that the company is a legitimate, profitable job for students. But only time will tell if Dang and others like her are the norm or the exception.

Comments

I read this article with some interest as the title suggested that the product was somehow inferior or a scam. Instead,I learned that entry-level jobs for students lacking in employable skills suck. I knew that already from my first job as a telemarketer my last summer in high school. Vector appears no worse than any other employer. Commission-based sales jobs are a rough way to go, but clearly some workers succeed at the endeavor. And Vector has a great sales strategy of sending kids to friends/neighbors/relatives. My neighbor's kid asked to practice his sales spiel on me many years ago. Of course I said yes, ad shocked him when I asked to purchase a set of knives. After more than thirty years, I still love my Cutco knives and would recommend them to anyone who loves o cook.

I sold Cutco cutlery back in 1978 when I was a college student. The story rings true. My mother and sister both bought cutlery sets from me and are still happy with them. I sold one other set and no more - wasn't cut out for sales. My demo set still gets used every day and I've added one or two knives to the set over the years. Cutco used to replace broken knives free of charge, regardless of the cause, though I don't think they do that any more.

Success is a choice.I started with this company as a naive 18 year old the summer following my freshman year at UCDavis. This opportunity has provided me with entrepreneurial experience that has molded my outlook on life as one of personal responsibility. Not only am I grateful for this, I am proud to represent Vector, and I am passionate about sharing this opportunity with others.It is not for everyone. Although even for those for which it is not, I believe it is (what can be painfully) valuable experience.It's hard, there's failure, and there are obstacles. And in this new economy our youth must fight for a position in the workforce. I am happy to "aggressively" provide opportunities for them to win that fight, and put themselves in a position of choice for the future.With that, Vector will gladly accept the invitation to attend the SBCC Fall Job Fair Sept 27th. See you on campus ;)

Hi, my name is Blake and many of you readers probably own some CUTCO thanks to me. When I started showing CUTCO my experience was a bit different then most due to the fact that I am legally blind. This meant that my experience lacked two important things: a training manual and a car. Yet my manager Monica Israel didn't give up on me and now, two years later, I've sold over sixty thousand dollars in kitchen knives, earned a corporate scholarship to help with school, won trophies and awards, gone on amazing company trips, made life-long friends, and interviewed and trained other sales reps and am a completely different (hopefully better) person because of it. So, when I hear Vector talked about like some big bad scam, my blood boils and I feel it's my duty to handle these accusations. I'll begin by giving those who don't know some insight into the Vector opportunity because the job is unique to say the least. Showing CUTCO is something that requires independence, self-motivation, and work ethic and I think most of us can agree that these qualities are not as common in the 18-21 year old demographic as one might hope. Working with Vector, you must set your own schedule, generate your own appointments, and take responsibility for your own business and I personally am proof that if you do these things, you will succeed. Now let's try to figure out why anyone would hold these misconceptions. The story that I've seen play out again and again is the new rep starts showing CUTCO, doesn't put in the work necessary to be successful (i.e. scheduling appointments, showing up to training), gets discouraged by his/her results, blames the company, then quits and labels Vector a scam. This sad story, I feel, is the entire reason for Vector's bad reputation. Anyone who thinks otherwise can feel free to contact me personally by phone or email and I'll be happy to explain myself further.

So this article is really outdated...or is just false in some instances if not just due to being outdated.

I currently work for vector marketing in southern california and when googling the company's website this came up and after reading the article I'd like to set some things straight.

Yes, the job does have weird recruitment tactics. They post fliers all around colleges and offer incentive for employees to help recruit friends. They do this because the company's success runs on the success and amount of employees, and according to my boss also because students are easier to work with and people would normally be more comfortable with a kid giving them demos in their home (if it's a live demo) than a middle-aged salesman.

We make $17/appt, which are about a 1/2 hour to an hour regardless of any sales. This article makes it seem like we only get paid if we make a sale, which is wrong. However, to reward those who work harder and make more sales you can earn between 10 and 50% commission each week if commission would be higher than the base $17-pay. So if you actually go on demos and do your job you're bound to make anywhere from $500-$1000/week (the average for my office). The only people I've met who really don't like the job are the ones who quit during training, or who rarely go on demos.....if you don't do you job how do you expect to make a salary, with any job?

We don't have to buy starter kits. Demo kits are loaned out to us to keep as our own and we just have to give them back if we quit or go on vacation for 3 weeks or more.

Vector actually isn't aggressive compared to most sales jobs. They actually make it very clear in training not to be pushy and to remember that if you don't make a sale you'll still get paid. I've previously worked in telemarketing and in sales at Nordstrom. If any reps are pushy then A) they're doing their job wrong and not listening to their managers or B) they probably are under more pressure to pay for a more expensive state or private college and not a community college.

You say that we sell door-to-door, but actually we're not allowed to. We're only allowed to contact people we know or people who are recommended to us to call in demos. I think the only exception for knocking on someone's door is if they're your next door neighbor whom you know very well. We're also not allowed to call anyone we were recommended to if the recommender hasn't called or texted a heads up prior to us calling.

The scandals and disappointment seem to come from people who don't really work. Yes, you are allowed a flexible schedule, but it's a job like any other, and many of the people who end up hating it and blaming the company are the ones who don't schedule demos or really do anything their managers recommend. In any other job this would get you fired, at vector you're allowed to stay and keep trying- no other sales job I know of would allow this if you don't actually put the work into the job.